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IASB tentatively decides to defer the IFRS 17 effective date

Nov 14, 2018

At its meeting being held in London today, the IASB discussed the effective date of IFRS 17 'Insurance Contracts' and ten­ta­tively decided to defer it to annual periods beginning on or after January 1, 2022. The IASB also ten­ta­tively decided to defer the fixed expiry date for the temporary exemption to IFRS 9 in IFRS 4 by one year so that all insurance entities must apply IFRS 9 for annual periods on or after January 1, 2022.

In its decision on the effective date of IFRS 17, the IASB followed the staff's line of argument that the Board plans to consider whether to explore amend­ments to IFRS 17 and that any un­cer­tainty about those amend­ments could disrupt the progress of im­ple­ment­ing IFRS 17. Together with the sig­nif­i­cant change that IFRS 17 will cause, this con­sti­tutes ex­cep­tional cir­cum­stances that justify the deferral. 14 Board members voted for deferring the effective date of IFRS 17.

The deferral of the fixed expiry date for the temporary exemption to IFRS 9 was a more con­tentious issue as the deferral would mean that some entities would not apply IFRS 9 up to four years after all other entities. However, the IASB concluded that without the deferral there would be two sets of major accounting changes in a short period of time resulting in sig­nif­i­cant cost and effort for preparers of financial state­ments. Avoidance of this had been the Board's original reason for providing the temporary exemption. 13 Board members voted for deferring the expiry date of the exemption.